"Back in 2003, Paul Tustain, founder of BullionVault, wanted to
buy some gold and went to Switzerland to do so. It turned out that
what was being sold wasn't actually the gold though, but a "promise
of a promise" of some gold. This is what is called "unallocated
gold" where there are various financial instruments between the
buyer and the actual gold. Tustain thought that this wasn't what
people wanted to do and inspired by the idea of online betting
exchanges, brought together a team to create an online gold
exchange which became BullionVault.com. Users can sign up and buy
gold, which is physically held in secure vaults in London,
Switzerland and New York, hold on to it for a storage fee or sell
it, all through an online front end.
"This is called "allocated gold"; outright ownership of the
physical metal. The vaults themselves are managed by another
company and are so secure that it is almost impossible to get
access, even for BullionVault. Users of the BullionVault systems,
once they have bought gold, can offer to buy or sell at the price
they select and the system matches up buyers and sellers. Now, with
100,000 registered users and 13,000 funded clients using the
English, French, German or Italian translations of the site, the
service is international and well established."
